Boeing's Disgraceful Downfall Explained

In this video we talk about the rise and fall of Boeing, one of the big two airplane manufacturers. For decades, Boeing was a favorite stock on Wall Street as their revenue and profitability grew year after year. However, their successes was derailed by the tragic 737 Max crashes in 2018 and 2019 as well as the pandemic which hampered demand for commercial airplanes. We examine what went wrong at Boeing and whether or not they will be able to mount a turnaround.

#WallStreetMillenial #Boeing

[Tuppoo]

A very graphic example of why you should never let accountants and MBAs run an engineering company. No amount of financial trickery will save you if your planes fall out of the sky.

[stevekranz]

I worked for Boeing for 29 years. Early on, the company mantra was "Excellence in Quality" and "Working Together." It was later changed to "Shareholder Value." Speaks volumes...

[didgerihorn]

A few key points to add:
- Starliner disaster
- Moving HQ to Chicago while outsourcing everything they could
- missed lunar lander contract

[kaizersolze]

Boeing merged with McDonnell-Douglas, McD did the management and Boeing's name was on the door. McD also made the DC-10, and aircraft with a known defect that the FAA did nothing about... not until 346 people died in two accidents. Now Boeing (with McD management) has done virtually the same thing with the 737 MAX 8 and interestingly, it took 346 deaths for them to admit they messed up.

[kencarp]

Boeing has descended from greatness into a tragic joke. As others have pointed out, this all started with the "McD Infiltration". McD management was cost-centric, shareholder focused not engineering focused, and basically TOXIC. They totally overwhelmed Boeing, moved HQ to Chicago, never talked with engineering out in Seattle, made the same kinds of stupid cost-cutting decisions they did at McD, built the 787 plant in Charleston to get rid of the union workers in Seattle and caused all manner of ongoing QC issues with the 787. They pretty much RUINED Boeing. Senior management should be completely replaced - and the people responsible for this colossal mess should be charged with crimes, convicted, and put in prison. Boeing today is the veritable poster child for "how NOT to run an aerospace company"... or ANY company.

My father worked for Boeing for nearly 30 years, retiring in 1971. He was in source quality control, and told me many stories about how he had personally rejected many parts because they didn't meet Boeing's high standards. He was always backed by management. I doubt much of that happens at Boeing these days. I'm glad he is no longer around to see how sad Boeing has become. It would break his heart.

[renaissanceman]

Don't know if I missed it but an important turning point for Boeing was when they merged McDonnell-Douglas. The old joke "McD bought Boeing with Boeing's money".
McD executives were the slimy business type from 80s movies and slithered their way to the top of Boeing pretty fast. Boeing executives were sort of naive nerds. All about profits from there

[tetchuma]

Considering all upper management received bonuses, even after the 2nd crash… I would not trust this management to sit the correct way on a toilet seat.

[bjornfly]

We did get a glimse of the company culture, focusing on profit, when some purchaser whistle blowed like 15 years ago, she got fired.

[David-zyjw]

Let's see, the CEO openly boasts: "when I came this company is ran by engineers and all they care about is building planes. I have to clean house and bring in financial guys so they would focus on making profits." Geez, what could of go wrong?

[SamSam-qmli]

Short terms profit for long term destruction

[hemaccabe]

Really sucks when people running the company don’t understand the limits.

[colinjohnson]

Boeing’s South Carolina plant was created to lower the labor cost since the Washington factories have experienced(competent) and expensive workers. Some airlines Will Not Take Delivery of planes made in SC because the workmanship is shoddy.
It’s really sad when a company with a good history chooses money over quality and safety. Boeing needs to fix upper management and firing a few people isn’t going to cut it

[tullochgorum]

You've been too kind. Yes - they designed the 737 Max to minimise pilot retraining costs - but it's deeper than that. Boeing had to move to the new generation engines, which are quieter and more fuel efficient. But they are also physically bigger, and wouldn't fit the 737 airframe properly. To save the multi-billion development costs of a new aircraft designed around the new engines, they bodged them onto the 737 airframe, even though this made it unstable. To compensate for the instability, they introduced the MCAS software system to help pilots manage the unstable flight characteristics. So the airframe is inherently dangerous. Then they compounded the problem by falling short on software quality control and the pilot retraining involved.

It's emerging that many engineers warned the management of these issues, but they were ignored by the bean-counters. This is corporate manslaughter, pure and simple.

[dennissalisbury]

To save a few pennies, Boeing squandered $billions, a case study in MBA Business Management Dysfunctionality.

[kalinovskiy]

That Jedi mind trick turned out to be very expensive for his company

[jeffreypierson]

"If it's not Boeing, I'm not going, " used to be a common phrase. You don't hear it much anymore. I contend it is the failure of management. Since Boeing purchased McDonnell Douglas, but kept their management, it has been a slide toward the same result as McDonnell Douglas.

Boeing corporate headquarters used to be in walking distance of the military airplanes and commercial airplanes. The management worked on the line. Engineers became managers and then executives. The management understood the consequences of pushing cost savings over safety.

This changed with the purchase of McDonnell Douglas. Stonecipher, formerly of MD, moved corporate to Chicago, so it wasn't around operations. The corporate decision makers are now divorced from understanding how their decisions affect safety, because they have never been involved. Stonecipher famously bragged that he had changed Boeing from an engineering firm into a business. He thought this was good.

Stonecipher opened a non-union plant in Charleston to save money. There is at least one airline that will not accept planes from this plant, because of quality issues. It takes decades to build an education system that feeds into a technological manufacturing plant, and it costs money. Boeing doesn't want to pay for the training, and doesn't want to pay workers what it takes to get the training, so it gets quality problems.

The 737MAX is just a symptom of the penny-wise and pound foolish management. For the $20B they have spent so far to fix the mess, they could have launched a clean sheet design. Alternatively, they could have pushed back launch of the MAX until MCAS was fixed to everyone's satisfaction. All of that would have caused more development costs, and management would rather have people die than have their EPS miss the consensus earnings.

[jaik]

What a disaster. The bean counters from MD took over, edging out engineering excellence

[leapdrive]

The problem with this type of mishap is no one goes to jail specially with people having died from company greed. This type of culture will continue unless people are held accountable and long jail time is issued.

[Fourside__]

Imagine beeing the pilot, having the presence of mind to deactivate the MCAS just for it to turn back on and keep the nosedive.. must have been terrifying and they were just powerless.. damn

[plnmech]

When will the stock holders say enough is enough ? They need to throw the bums out and start over with a clean sheet plan. New people new plan, new ethics and new customer first plan because the customer pays for everything.